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News: Harley-Davidson Closes Kansas City Plant - What Happened?

News: Harley-Davidson Closes Kansas City Plant – What Happened?

The Last Nail in the V-Rod’s Coffin and Harassment Allegations at Harley-Davidson

Friday May 24th was the last day of production at the Harley-Davidson’s factory in Kansas City, Missouri.  Closure was announced earlier in the year but the shutdown process began as early as August of 2018. The factory was built in the late 1990’s at a cost of approximately $85 million dollars. At the time, thirty other communities were competing to have Harley-Davidson build in their towns, offering tens of millions in state tax abatement and other incentives. Twenty two years later, it’s been shut down, and about 800 employees are out of jobs.

Harley’s media statement:

“The Kansas City plant has been assembling Harley-Davidson motorcycles since 1997, and our employees will leave a great legacy of safety, quality, collaboration and manufacturing leadership. We are grateful to them and the Kansas City community for their many years of support and their service to our dealers and our riders.”

What bikes are effected and where will they go?

The plan is for production from the Kansas City factory to be shifted to the company’s York, Pennsylvania factory. This should create 450 new jobs in Pennsylvania where Harley-Davidson is investing $150,000,000 to expand their state-of-the-art plant. The expanded York plant will take over production of the Sportster, Dyna, and Street family of motorcycles previously made in Kansas City.

How does the V-Rod play into this?

The original first generation V-Rod was everything Harley-Davidson wants to offer customers today, but it came eighteen years too soon. By the time the V-Rod entered it’s final production generation it was too heavy, fat, and expensive for a new generation of riders to get into it. There was always hope, especially among the V-Rod fanbase on 1130cc, that the V-Rod would be brought back as the bastion of Harley-Davidson’s performance potential. An 1130cc (and later 1250cc) motor that put their big twins to shame.

Harley enthusiasts had hopes that as long as the plant stayed open, there would always be an opportunity to bring the V-Rod back to production, once the market was once again ready for it. While we have seen other companies bring back models from their past (think Suzuki bringing back the Katana thirteen years after it was last produced), the Kansas City plant officially shutting down may be the last nail in the V-Rod’s coffin. That’s a real shame, because it was arguably the greatest bike Harley-Davidson has ever produced, and undoubtedly the most future-forward one.

So why did the Kansas City factory close?

When Harley-Davidson first made the announcement last year, they blamed the need to close the plant on President Trump’s trade policies and soft sales. A tariff increase on motorcycles that Harley-Davidson sold in the European Union meant that Harley’s motorcycles would cost over $2,000 more per motorcycle in Europe, on every motorcycle made in America and sold in the Europe. This created a need to move production overseas.

Random motorcycle history blurb: Companies building factories in Europe to get around tariffs and trade barriers is nothing new. One of the most successful examples in motorcycling was the Honda Hornet a.k.a. the Honda 599. In the early-2000s, the Honda 599 was the hottest selling street bike in Europe. It was a European-styled and European-built street bike, with Japanese performance and reliability. Honda was selling so many of these things that they were making them in Italy so they could keep the price down for European riders.

Harley will be opening more plants outside of the United States (not just in Europe, but also in Thailand and possibly Malaysia) to sell to foreign markets. According to Harley-Davidson, motorcycles made overseas would be for overseas sales only, and any Harley-Davidson sold in America would still be made in America. Still, the decision has created a rift not only between Harley and their employees, but also between Harley and many other Americans.

watch this video

So what’s happening to the Kansas City plant?

The plant has grown over the years from 400,000 initially to over 500,000 square feet. It sits on a 314 acre lot that you can buy for only $26,500,000. Sure, that’s a lot of money, but when you take into account the $85,000,000 to build the facility, and the fact that the deal includes a paint booth system that cost $30,000,000 alone, it’s a steal of deal. Not to mention you have 600 machinists and other skilled workers nearby just waiting to get to work… Any billionaires out there want to bring back the V-Rod? Send me an email and let’s get to work!

So what about those out-of-work employees, anyway?

*sigh* That’s a loaded question. Harley made it clear to them that the plant would be closed back in January, so they’ve had a few months to try to figure out their next move. The Motor Company has been providing support to help employees transition to new work, which includes a workforce development center that has operated at the plant for the past year, hosting job fairs with other local employers and offering free workshops for employees to develop new skills to help them be more sought after by other employers. If this is true, that’s a classy move on the Motor Company’s part and helps to make the most of an unfortunate situation.

But it isn’t all classy…

Nope. Not at all. Minority workers at the Kansas City plant say they’ve been the victims of racism and harassment for years. There’s been allegations of swastikas and nooses found all over the plant. Harley-Davidson says that they’ve investigated any and all reported claims, but the media reports that harassment only became worse as the closing of the plant drew nearer. There’s no denying that the situation sucks, but come on Kansas City, be better than that.

Conclusions

The Kansas City Harley-Davidson plant closing should allow for the motor company to “cut the fat” and focus on areas of opportunity that will hopefully keep the Motor Company alive for another hundred years. Unfortunately, this is bad news for V-Rod aficionados, and terrible news for the local economy. The 450 new jobs being created in Pennsylvania are only about 56% of the jobs lost in Missouri. Harley-Davidson is operating from an “Evolve or Die” mindset, so the company looks a lot different than it’s former self. What happens next is anyone’s guess.

COMMENT SECTION: Will Harley-Davidson survive the next few years? If Trump isn’t re-elected or his trade policy changes will Harley’s fortunes turn?
Let me know what you think!

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25 comments

  1. Trumps trade policy did not hurt HD. HD has hurt themselves.

  2. Harley is to blame for their own problems. The V Rod was an excellent motorcycle. If they had put it in a sport touring platform they would have attracted the new customers they were looking for. In this platform it would have attracted every police department in the country. HD could not get away from their feet forward old school demographics and that is hurting them and has been for some time. The had the Buell to attract new customers into dealerships but for the most part their dealers did not embrace the brand and tried to continue to build an aging demographic. Once again they had the opportunity to develop new customers but policy and attitude kept them from growing. I am not the least bit surprised that they have to downsize, just look at their sales figures.

    • True , I agree and I was a PHD Master Harley Davidson Technician for 20 Years till last year when I had my fill of them. So disappointed in their ways of treating their techs like they wish they did not have to have them around at the shops, and Harley Davidson being all union. The Harley Davidson Shops are not.They had so many recalls the last few years and the EPA coming down on them for their tuner , which you could still buy in other countries. The shops are all afraid of being fined by the EPA to do any performance work any more, just the kits Harley Davidson sells. So as a Master Technician all they was giving me any more was to do all their recalls which do not pay enough, so you was always having to wonder if you would get any pay check that would pay your bills.I always wonder why they would not put the v-rod in a touring model , which would have sold big time. The V-rod is the only bike they built that we did not have any problems with.Would run circles around their other bikes. The Buell was a great bike also, but strange when Mr Buell and his wife separated he was not part of the family anymore , and strange the Buell was done away with. I could say and tell many things about Harley Davidson but will say no more , have said to much already.

  3. white trash choppers

    Nice article except where you said V rod was “the greatest bike Harley-Davidson has ever produced, and undoubtedly the most future-forward one. ” You are kidding right ? There not even in the top 25 best bikes built by harley ,Probably closer to one of the 5 worst ones , When the motor was designed in the early 80’s it was laughed at by most everybody ( the nova project ) & was shelved for years then brought back to missed reviews. I’m my 25 years of being a shop owner I’ve only met 2 people that liked them .

  4. Reminds me of the 1970s in the UK when all our motorcycle manufacturers refused to adapt to overseas competition hanging on to domestic sales. 1979 there was not a single UK manufacturer producing anything. It died a painful death due to old boardroom mentality of it will never happen to us and it did !! The same goes for Harley Davidson, it has spent its entire existence relying on domestic sales but now the faithful are old folk that will not be renewing the machines and the new generation do not want heavy cumbersome machines that are not on trend, sorry guys it will end as there is nothing going on to prevent it falling, it will take 5 years to develop a new range of modern motorcycles that has a 10 year life expectancy and the old folk at the top just will not get behind it. 1979 all over again and the problem is so deep rooted within the company and the culture at the top that to blame Trump is just a perfect example.

  5. Jason Crasinaki

    Harley blaming Trump? Haha what a joke!
    If their shit is all American, why would a tariff hurt?
    And any good healthy business should be able to adjust, they’re just not one. And for them to blame European sales is a joke, they don’t even sell that many units in Europe… sounds like a bunch of finger pointing when Harley should look in the mirror. They hurt themselves and they hurt their dealers every day….

    • Hey, Jason…you’re pretty heavy on “slagging” HD….but falling way short on your stats.

      Do you have any idea how many bikes Harley exports to Europe and elsewhere? TONS! Have a look: https://www.statista.com/statistics/252220/worldwide-motorcycle-retail-sales-of-harley-davidson/
      Seems they sell a about a quarter of all their production just to Europe, the Middle East and Africa and ANOTHER substantial chunk to Asia and Latin America. That’s no small potato-potato-potatoes!

      And, unless you’re an economist (which I doubt, based on your free-wheeling banter about tariffs) you might not have much appreciation for what world trade can do to an American based corporation when twits like tRump start messing with “rules and regulations” THEY don’t understand either!

      I must admit I’ve always been as neutral about Harley’s motorcycles as I have about Madonna’s music, but you gotta give them both a lot of credit for being marketing geniuses over the years, developing bullet-proof images and brands. and growing loyal fan bases that number in the millions and keep the “dream” alive.

      That said, things do get old and tired, no matter how good a manufacturer/merchandiser you are, and you’ve got to keep re-inventing yourself if you wanna protect the bottom line. (Take HONDA ….and MICK, for example! LOL)

  6. When Trump puts an import tariff on something, the left freaks out and starts shrieking like little children. Meanwhile, Europe and other nations putting stiff tariffs on American goods for the last 30yrs, and the left says nothing. I stopped at a HD dealer in Paris while visiting one time, and was shocked at the prices of the bikes. A 21k touring bike was close to 40k. I asked the owner why and he said, it was import duties and taxes, otherwise they’d be close to the same price. He knew what he was talking about since he lived in the US for almost 20yrs before moving back home to France and starting the dealership.

  7. A little economics 101. Tariffs are hugely disruptive to businesses. Trump’s 25% tariff on steel increases the cost of US products with a large steel component, like Harley, and Caterpillar and the Auto Industry. Harleys (and Indians) become more expensive compared to other brands both here and in other countries because those countries can build their motorcycles with steel that is 25% cheaper. Tariffs as well as import duties as Jackson mentioned in France can be overcome by building motorcycles where they are sold. Harley’s US sales are sliding. Europe is a big potential market for their current models if they can become more cost competitive. Why shouldn’t they go for that by moving some production to Europe while navigating the much trickier path of coming up with new products to attract new US riders from a generation that is not embracing riding?
    My take is that Harley brought out the V-Rod to show that they could make a high performance water-cooled bike, which, like most high performance bikes had poor fuel economy and an awkward seating posture, thus limiting its touring application. It didn’t sell well and Harley discontinued it. You can bet they learned a lot from the experience and will put that to use in future higher performance motorcycles as the motorcycle market morphs.

  8. The Left wants working people in the USA to thrive. The Right wants the 1% to make a billion a week because a million isn’t enough.
    Trump and his excuse making fairy’s have 25% of the US Farmers going broke. Harley-Davidson, GM, Ford and all the manufacturing around the USA are hurting, all because of Trump’s Tariffs. Why anyone would take the word of a draft dodging liar and business failure. Since Trump was elected the economic shift has stalled out on every front… Blame the Trump supporters because Trump would never admit he’s a loser or wrong.
    If Trump would admit he made a mistake it wouldn’t fix lost business or customers.

    • Dan Jacobson, you are one of the dumbest people I am happy not to know. You have no clue.

    • TY. I know tariffs are hurting U.S. business. But Harley , like Trump, are arrogant and have refused to change also. A British gent somewhere up the column spoke of the British motorcycle industry and how they went belly up. John Blood and his his purchase if TRIUMPH MOTORCYCLES brought the company back from death. Now most production of these well made motorcycles is in Thailand, and Harley is following their lead. Always said Bloor made Trump look like a loser also…lol

  9. V Rod is the benchmark all future models will be judged by.
    HD have shot themselves in the foot from a USA sales point by hesitating at the behest of the old schoolers and dealers when it was released.It should have morphed into todays lineup eliminating the ‘need’ for 100 new models bullshit they’ve come up with.
    Who the hell wants to wait around for years for some cheapened out pseudo V Rod replacement that will cost the same or more knowing the new model pricing these guys dish out, (witness the outrageous cost of the FXDR thing they can’t sell).
    Asian markets will lap up the brand regardless the offering. They want a taste of the western lifestyle right or wrong and are on a growth trajectory that will sustain HD into the future.
    I’m hanging on to my Willie G masterpiece because they don’t make em like that anymore.

  10. Michael S Stevenson

    You can buy a nice car for the price they are asking for a motorcycle that is going to set in your garage for atleast 4 to 5 months of the year. Charge less sell more! And they offer credit with Harley at 19 to 20 something percent interest. You will be paying double almost triple for a used bike. Lol

    • Yep. Only once have I ever bought a vehicle I couldn’t purchase in cash in full. If I can’t pay for it, and it’s not an asset that will increase in value (like property), it’s not for me to have yet.

  11. Both sides have good points but as my fellow countryman up near the top of this column rightly pointed out Triumph and indeed the rest of the British marques went the same way and yet the lesson wasn’t learned!
    Nine months ago, I changed my 2002 US Import 1200S Sportster for a 1450 Dyna SuperGlide Sport that was three years OLDER than my Sporty! Why? Well, they don’t make ’em any more! So my Sporty had really held it’s value ‘cos there’s currently only 460 1200S models left in the UK, and my “new” Dyna has a replacement value of £9,100 on it and depreciation set at only £150 per year! (Valued one year ago by my local Harley dealer for insurance purposes. Written agreement provided).
    As for the new models: I recently test rode a 2018 Street Bob and a 2019 Breakout. Didn’t care much for either of them frankly. You could easily put a Japanese name badge on the Breakout especially, charge half of the £18,500 price tag and it MIGHT then sell a bit more, but it is STILL not a comfortable machine to ride for more than 45 minutes! Does look good parked though!
    Watching the stock at my local dealer and talking with the sales guys there, the new models are simply not selling.They are now frankly, simply overpriced and overweight variants of their once proud predecessors. Some of them are not even attractive to look at! Even the fleet of new demonstrators do not seem to go out much!
    The USED bikes however, are selling like hot cakes! Average turnover on one that has been taken in is about 2 weeks! There is one enterprising guy who comes over EVERY three months from Belgium with a van and trailer. He specifically buys as many used Sportsters as his money will get him, before coming back again in 12 weeks with more cash! WAKE UP Harley! If you don’t, you won’t be sent to Coventry; you’ll find you’ve put yourselves in MERIDEN!

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